How to Reduce Your Debts

Debt is something that everyone has at some point in their lives. Whether you owe money from loans, credit cards or store cards, debt is never fun to deal with.

Debt affects us in several ways: emotionally, mentally, physically, socially, and spiritually. If you are dealing with debt, then you probably also face these challenges.

Many people struggle to pay off their debts because they don’t know where to begin, which adds to the emotional turmoil. It’s important to think about it logically and take it one step at a time.

Step 1: Set a Budget

Set a budget for how much you can realistically afford to allocate each month to pay off your debt and make a commitment to stick to it.

Step

2: prioritise

Make a list of all your debts with the name of the creditor, total amount owed, minimum monthly payment and interest rate. Choose the debt with the highest interest rate and prioritise paying that one off. Then choose the next highest rate, then the next, and so on.

Step 3: pay More Than the Minimum Balance

If it’s feasible then always try to pay more than the minimum payment on any outstanding balance – even £10 or £20 a month can make a big difference. You’ll pay less interest, reduce the amount owed more quickly, and improve your credit rating.

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4: Use cash rather than a credit card

If you can, try to use more cash to pay for everyday or smaller items: it will leave you with more funds to channel into reducing your debt.